Gas Transmission Asset Management Plan Update Information ... · Maungaturoto 2,629 2,604 2,604...

Gas Transmission Asset Management Plan Update Information Disclosure 2014

Gas Transmission Asset Management Plan Update - 2014

Date: 14 May 2014 Vector Gas Transmission of 41

CONTENTS 1. Introduction ............................................................................................... 4 2. Update on system development planning and capacity assessment ........... 5

2.1 North System ..................................................................................................... 5

2.2 Central (North) System ........................................................................................ 7

2.3 Central (South) System ....................................................................................... 9

2.4 Bay of Plenty System ......................................................................................... 10

2.5 South System ................................................................................................... 13

2.6 Frankley Road to Kapuni System ......................................................................... 16

2.7 Other Systems .................................................................................................. 17

2.8 Summary of Significant Changes to Capacity Assessment ........................................ 18

2.9 Asset Relocations .............................................................................................. 18

2.10 System Growth ................................................................................................. 19

2.11 Consumer Connections ....................................................................................... 19

3. Update on asset maintenance, renewal and replacement ......................... 19 3.1 Flexflo Regulator Obsolescence ........................................................................... 19

3.2 Bruce McLaren Delivery Point .............................................................................. 19

3.3 Whitecliffs Pipeline Relocation ............................................................................. 20

4. Update on legislative requirements .......................................................... 20 5. Update on asset management practice ..................................................... 20 6. Project programme update ....................................................................... 20 7. Capital and operational expenditure forecast update ............................... 23

7.1 Capital Expenditure ........................................................................................... 23

7.2 Operational Expenditure ..................................................................................... 24

7.3 Explanation of Significant Changes ...................................................................... 25 7.3.1 Capital Expenditure ..................................................................................................... 25

7.3.2 Operational Expenditure ............................................................................................... 25

Appendix 1 – Schedule 11a Report on Forecast Capital Expenditure .................................... 26

Appendix 2 – Schedule 11b Report on Forecast Operational Expenditure .............................. 32

Appendix 3 – Schedule 12a Report on Asset Condition ...................................................... 36

Appendix 4 – Schedule 12b Report on Forecast Demand ................................................... 39



LIST OF TABLES

Table 1: North System Delivery Point Capacity Forecasts ........................................................ 5 Table 2: North System Delivery Point Capacity Commentary ................................................... 6 Table 3: North System Pipeline Capacity Forecast .................................................................. 7 Table 4: Central (North) System Delivery Point Analysis ......................................................... 7 Table 5: Central (North) System Delivery Point Commentary ................................................... 8 Table 6: Central (North) System Pipeline Capacity Forecast .................................................... 8 Table 7: Central (South) System Delivery Point Analysis ......................................................... 9 Table 8: Central (South) System Delivery Point Commentary .................................................. 9 Table 9: Central (South) System Pipeline Capacity Assessment ............................................... 9 Table 10: Bay of Plenty System Delivery Point Analysis ........................................................ 10 Table 11: Bay of Plenty Delivery Point Commentary ............................................................. 11 Table 12: Bay of Plenty Pipeline Capacity Assessment .......................................................... 12 Table 13: South System Delivery Point Analysis .................................................................. 13 Table 14: South System Delivery Point Commentary ............................................................ 15 Table 15: South System Pipeline Capacity Assessment ......................................................... 16 Table 16: Frankley Road to Kapuni System Delivery Point Analysis ......................................... 16 Table 17: Frankley Road to Kapuni System Delivery Point Commentary .................................. 17 Table 18: Frankley Road to Kapuni Pipeline Capacity Assessment ........................................... 17 Table 19: Other Systems Delivery Point Analysis ................................................................. 17 Table 20: Other Systems Delivery Point Commentary ........................................................... 18 Table 21: System Development Planning Projects and programmes ....................................... 21 Table 22: Asset Maintenance, Renewal and Replacement Projects and Programmes .................. 22 Table 23 : 2013 AMP capex forecast .................................................................................. 23 Table 24 : AMP update capex forecast ................................................................................ 23 Table 25 : Variances between 2013 AMP and AMP update capex forecasts ............................... 23 Table 26 : 2013 AMP opex forecast .................................................................................... 24 Table 27 : AMP update opex forecast ................................................................................. 24 Table 28: Variance between 2013 AMP and AMP update opex forecasts ................................... 24



1. INTRODUCTION This Asset Management Plan (AMP) update has been prepared to inform Vector’s customers and other stakeholders of material changes and updates to asset management planning since 30 September 2013, when the first full Gas Transmission AMP for the 2013-2023 forecast period (2013 AMP) was published.1 In particular it contains updated 10-year capital expenditure (capex) and direct operational expenditure (opex) for the gas transmission pipelines. These have been revised to reflect changes to forecast work programmes and efficiency gains identified during the course of the last year and ongoing analysis of the performance and condition of the assets.

In addition, this update fulfils Vector’s regulatory disclosure requirements, as set out under Clause 2.6 of the Commerce Commission’s Gas Transmission Information Disclosure Determination 2012 (IDD).

As part of Vector’s ongoing operation, the 2013 AMP, and this AMP update are important components of our pipeline growth, maintenance and investment planning processes. It also forms a key input into the annual capex and direct opex budget. However, when reading these documents, it is important to note the following:

While the 2013 AMP and this update present Vector’s best view of its asset management and pipeline investment intentions at the time of publication, it does not commit Vector to carrying out any of the individual projects or initiatives described within the document. These may be amended to reflect changes to Vector’s regulatory or operating environment, customer energy demand trends and requirements, customer or pipeline technology changes, stakeholder expectations or Vector’s commercial priorities.

Projects and initiatives described in the 2013 AMP or the update are subject to internal governance procedures, including meeting financial approval requirements before they can proceed. Once the future asset or asset requirements are established, options for addressing these needs are evaluated and potential solutions identified. Decision tools and systems used to support the evaluation of options include demand flow analysis, effective capital budgeting techniques, optimised renewal modelling, life-cycle costing, risk assessments and geographic information. At the same time, the feasibility of non-asset or unconventional solutions to address asset requirements is also considered. This may lead to changes in the scope of works or the overall programme.

Uncertainty associated with the regulatory regime that applies to the gas transmission business remains a significant factor weighing on the ability to and appetite for investing in line with the forecasts reflected in this Update. The potential for unexpected adverse changes to the regulatory regime (such as the narrow scope review of Weighted Average Cost of Capital percentile) may act as a disincentive to invest.

1 A copy of this AMP is available on the Vector website, at http://vector.co.nz/gas-asset-management



2. UPDATE ON SYSTEM DEVELOPMENT PLANNING AND CAPACITY ASSESSMENT

This section provides an updated system capacity assessment and discusses factors that lead to material changes to the system development plans described in section 5 of Vector’s 2013 AMP.

2.1 North System

Delivery Point Analysis

Delivery Point

Actual Max Flow

(2013)

Predicted Max Flow (2015)



Station Max Flow

Capacity

Year of breach

of design

capacity

Comments

Tuakau 1,356 1,531 1,630 1,755 1,730 2023 Heater Harrisville 3,588 4,714 5,671 6,867 3,200 2013 Heater/meter Pukekohe 565 404 407 412 1450 - - Kingseat 3 22 22 22 50 - - Glenbrook 11,856 10,826 10,826 10,826 12,000 - - Papakura 18,632 20,247 20,936 21,866 24,600 - - Ramarama 253 258 271 287 390 - - Drury 1,2 2,053 2,479 2,713 3,037 3,280 - - Hunua 1 771 858 858 858 1,170 - - Hunua 2 601 611 632 660 920 - - Hunua 3 87 1550 1550 1550 3,780 - - Alfriston 141 194 194 194 430 - - Flat Bush 2,236 2,415 2,415 2,415 6,590 - - Otahuhu B 70,345 68,750 68,750 0 119,730 - - Westfield 42,982 45,090 46,625 48,698 72,850 - - Southdown 40,665 41,250 41,250 41,250 118,100 - - Bruce McLaren

2,063 1,987 2,054 2,146 2,378 - -

Henderson 11,657 11,074 11,451 11,960 13,500 - - Waitoki 1,409 1,550 1,768 2,067 4,300 - - Warkworth 2,016 2,330 2,677 3,112 2,280 2015 Regulators Wellsford 0 4 4 4 50 Maungaturoto 2,629 2,604 2,604 2,604 2,530 2012 Pipework

velocity Marsden Point (CHH)

211 207 207 207 8,500 - -

Marsden Point ( Refining NZ)

11,778 10,000 10,000 10,000 8,500 2012 Heater

Oakleigh - - - - - - Decommissioned during FY14

Whangarei 954 1,037 1,028 1,028 2,930 - - Kauri 3,241 2,995 2,995 2,995 3,810 - -

Flows are in standard cubic metres per hour (scmh)

Table 1: North System Delivery Point Capacity Forecasts

Also indicated in Table 1 are the components (if any) that limit gate station capacity and are anticipated to lead to a design breach within the planning period. These are discussed in more detail in Table 2 below.

Delivery Point Commentary Tuakau A new station is currently being built at Tuakau (replacing the current site). An allowance

of $500k has been made in FY15 to complete this upgrade. This upgrade will take account of growth assumptions for the next 10 years.



Delivery Point Commentary Harrisville A new station is currently being built in addition to the existing station at Harrisville. The

existing station was running close to the design limits of both the water bath heater and the meter. An allowance of $1.0M has been made in FY15 to complete this DP construction.

Pukekohe The station can meet the maximum predicted flow to FY24 and will not require upgrade. Kingseat The station can meet the maximum predicted flow to FY24 and will not require upgrade. Glenbrook This station is dedicated to supplying Bluescope Steel. The pipeline pressure regulation

has been removed at Pukekohe, which has increased the inlet pressure at Glenbrook. A second heater was installed and commissioned in FY13 to allow the station to manage this higher inlet pressure. The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Papakura This station was upgraded during FY11/12, including the regulators, meters and coalescer. A new heater was installed in FY09. The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Ramarama The station can meet the maximum predicted flow to FY24 and will not require upgrade. Drury 1, 2 The station meter was upgraded in FY11/12 and the heater was upgraded in FY12/13. The

station can meet the maximum predicted flow to FY24 and will not require upgrade. Hunua 1,2 & 3 The stations can meet the maximum predicted flows to FY24 and will not require upgrade. Alfriston The station can meet the maximum predicted flow to FY24 and will not require upgrade. Flat Bush The station can meet the maximum predicted flow to FY24 and will not require upgrade. Otahuhu B This station supplies only the Otahuhu power station. There is no load growth expected at

this station. The station can meet the maximum predicted flow to FY24 and will not require upgrade. It is assumed that there will no longer be any demand at Otahuhu following a major overhaul during FY18-19.

Westfield This station is the dominant supply for industrial, commercial and domestic loads in the centre of Auckland. The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Southdown This station supplies only the Southdown power station. The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Bruce McLaren The station can meet the maximum predicted flow to FY24 and will not require upgrade. Henderson The station is the dominant supply for residential and commercial customers in the

northern part of Auckland and was upgraded in FY12. The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Waitoki The station can meet the maximum predicted flow to FY24 and will not require upgrade. Warkworth This station will need a regulator upgrade in FY16. An allowance of $200k is included for

the work in the 10-year capex forecast. Wellsford The station can meet the maximum predicted flow to FY24 and will not require upgrade. Maungaturoto This station solely supplies a dairy factory where the largest demand is during Oct/Nov

each year (outside peak week). Although pipework capacity is theoretically exceeded, actual operating data suggests that pipework velocity is not presenting any problems at current flow rates. Upgrade is not planned. The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Oakleigh This station was decommissioned during FY14. Marsden Point (CHH)

This is the load to Carter Holt Harvey board mill. The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Marsden Point (Refining NZ)

This is the interruptible supply to the Refining NZ which typically uses around 7000 scmh, but can nominate to take volumes in excess of 10,000 scmh for small periods of time (less than a few hours each day). Although heater capacity is theoretically exceeded, actual operating data suggests that heater performance is adequate at current flow rates. Upgrade is not scheduled.

Whangarei The station can meet the maximum predicted flow to FY24 and will not require upgrade. Kauri This station supplies a dairy factory, where the largest demand is during Oct/Nov each

year (outside peak week). There is no load growth associated with this station. The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Table 2: North System Delivery Point Capacity Commentary



Pipeline Capacity Assessment

Delivery Point

Aggregate Contractual

Capacity (GJ/day)

Uncommitted Operational Capacity (GJ/day)

FY14 FY19 FY24

Tuakau 1,095 21,051 22,218 21,738 Harrisville 1,866 22,279 21,537 21,521 Ramarama 125 11,902 11,812 13,168 Drury (Total) 1,440 24,360 21,871 51,072 Pukekohe 246 21,665 21,042 20,889 Glenbrook 7,510 10,485 10,180 10,028 Greater Auckland 52,103 13,807 12,909 30,529 Hunua (Total) 2,370 17,215 14,918 41,826 Flat Bush 1,942 19,272 16,915 49,638 Waitoki 657 3,749 2,978 3,304 Whangarei 605 3,071 2,757 3,788 Kauri + Maungaturoto 2,500 1,223 1,164 1,457

Otahuhu B + Southdown 78,000 23,400 20,280 54,120

The Aggregate Contractual Capacity for Tuakau in FY19 and FY24 is 4,839 GJ/day. The Aggregate Contractual Capacity for Harrisville in FY19 and FY24 is 2,202 GJ/day. The Aggregate Contractual Capacity for Otahuhu and Southdown Power Stations in FY24 is 33,000 GJ/day. The Uncommitted Operational Capacity at Glenbrook is based on full line pressure. The peak week identified in FY14 for this system was week commencing 08 July 2013

Table 3: North System Pipeline Capacity Forecast

2.2 Central (North) System


Delivery Point Name

Actual Max Flow

(2013)




Station Max Flow

Capacity

Year of breach

of design

capacity

Comments

Te Kowhai 5,693 6,015 6,334 6,733 8,128 - - Temple View 9,268 10,547 11,107 11,806 10,800 2017 Meter Te Rapa 23,856 26,563 26,563 26,563 28,000 - - Horotiu West 971 1,290 1,367 1,464 2,700 - - Matangi 0 4 4 4 50 - - Cambridge 3,063 2,951 2,986 3,106 3,400 - - Kiwitahi 1 1,102 1,062 1,062 1,062 3,100 - - Kiwitahi 2 153 144 144 144 340 - - Morrinsville (Dairy) 2,247 2,246 2,246 2,246 4,200 - - Morrinsville 477 584 599 619 1,370 - - Tatuanui (Dairy) 1,407 1,037 1,037 1,037 1,550 - - Waitoa 1,892 2,314 2,567 2,883 3,200 - -


Table 4: Central (North) System Delivery Point Analysis

Also indicated in Table 4, are the components (if any) that limit gate station capacity and anticipated to lead to a design breach within the planning period. These are discussed in more detail Table 5 below.



Delivery Point Commentary Te Kowhai The station can meet the maximum predicted flow to FY24 and will not require upgrade. Temple View This station was upgraded in FY08, with new heater, regulators and filters and was

designed to accommodate a maximum future load of 15,000scmh. An existing consumer is planning to significantly increase their demand during FY14. This would exceed the peak flow limit at the station so the meter upgrade has been brought forward to FY14.

Te Rapa Te Rapa supplies a Cogen plant and the regulators were replaced due to condition during FY09-11. No load growth is currently forecast at this station and historic peak demand has been well under the contractual maximum capacity. The existing heater and meters are sufficient for future loads. Upgrade is not scheduled.

Horotiu A large potential new load has been identified that would be supplied from this delivery point. This could require a major upgrade of the delivery point in the next 1 -2 years. An allowance of $0.3m for upgrade has been made.

Matangi It is anticipated that this station can meet the current and future flows. There is no water bath heater at this station, but given the limited load, no installation is recommended.

Cambridge The station can meet the maximum predicted flow to FY24 and will not require upgrade. Kiwitahi 1 (Hydrogen Peroxide Plant)

The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Kiwitahi 2 (Distribution Network)


Morrinsville 1 (Dairy)

This dairy load is forecast to remain constant to FY24 and the station will not require upgrade.

Morrinsville 2 (Town)


Tatuanui (Dairy) This load is forecast to increase in the next 12 months due to an expansion at the dairy factory. An allowance of $0.3m for upgrade has been made.

Waitoa The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Table 5: Central (North) System Delivery Point Commentary


Delivery Point Aggregate Contractual

Capacity (GJ/day)


FY14 FY19 FY24

Cambridge 2,462 769 486 488 Greater Hamilton 9,036 11,802 7,647 5,712 Horotiu 537 8,546 4,730 3,919 Kiwitahi 1,132 3,046 1,976 1,514 Morrinsville 2,028 2,452 1,563 1,200 Tatuanui 1,004 3,103 1,996 1,565 Te Rapa Cogen 25,500 11,983 8,158 6,628 Waitoa 1,607 1,328 748 476

The peak week identified in FY14 for this system was week commencing 02 September 2013

Table 6: Central (North) System Pipeline Capacity Forecast



2.3 Central (South) System


Delivery Point Name

Actual Max Flow

(2013)




Station Max Flow

Capacity

Year of breach

of design

capacity

Comments

Eltham 809 902 902 902 2,310 - - Stratford 615 681 681 681 2,610 - - Kaponga 26 32 40 50 200 - - Inglewood 316 321 321 321 1,010 - - Waitara 655 648 648 648 1,700 - - New Plymouth 6,166 5,862 5,862 5,862 7,000 - -


Table 7: Central (South) System Delivery Point Analysis

Also indicated in Table 7 are the components (if any) that limit gate station capacity and anticipated to lead to a design breach within the planning period. These are discussed in more detail in Table 8 below.

Delivery Point Commentary Eltham The station can meet the maximum predicted flow to FY24 and will not require upgrade. Stratford The station can meet the maximum predicted flow to FY24 and will not require upgrade. Kaponga The station can meet the maximum predicted flow to FY24 and will not require upgrade. Inglewood The station can meet the maximum predicted flow to FY24 and will not require upgrade. Waitara The station can meet the maximum predicted flow to FY24 and will not require upgrade. New Plymouth The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Table 8: Central (South) System Delivery Point Commentary



Capacity (GJ/day)


FY14 FY19 FY24

Eltham 610 8,525 8,525 8,525

Inglewood 169 4,575 4,575 4,575

Kaponga 9 3,290 3,285 3,281

New Plymouth 4,136 1,687 1,687 1,687

Stratford 334 11,754 11,754 11,754

Waitara 355 4,469 4,461 4,453

The peak week identified in FY14 for this system was week commencing 08 July 2013

Table 9: Central (South) System Pipeline Capacity Assessment



2.4 Bay of Plenty System



Table 10: Bay of Plenty System Delivery Point Analysis Also indicated in Table 10 are the components (if any) that limit gate station capacity and anticipated to lead to a design breach within the planning period. These are discussed in more detail in Table 11 below.

Delivery Point Name

Actual Max Flow

(2013)




Station Max Flow

Capacity

Year of breach

of design

capacity

Comments

Kihikihi 1,009 1,229 1,229 1,229 2,090 - - Waikeria 197 282 312 351 790 - - Putaruru 504 589 550 531 1,000 - - Tirau 1 (Dairy) 2,230 2,122 2,122 2,122 5,800 - -

Tirau 2 (Town) 48 75 89 107 600 - -

Okoroire Springs 0 3 3 3 50 - -

Pyes Pa 537 335 353 375 1,790 - - Tauranga 1,740 2,275 2,396 2,547 2,580 - - Mt. Maunganui 3,124 2,677 2,677 2,677 4,680 - -

Papamoa 776 1,298 1,556 1,878 2,730 - - Te Puke 416 658 814 1,009 900 2022 Meter Rangiuru 628 932 932 932 950 - - Lichfield (Dairy) 2,717 2,818 2,982 3,188 4,970 - -

Tokoroa 1,466 812 812 812 2,320 - - Kinleith (Paper Mill) No.1

24,503 27,184 27,184 27,184 19,670 2012 Pipework velocity

Kinleith No.2 265 258 264 271 370 - -

Rotorua 3,417 3,629 3,547 3,547 2,494 2012 Regulator Reporoa 2,568 2,793 2,715 2,715 2,627 2012 Pipework

velocity Taupo 1,176 1,494 1,674 1,897 2,494 - - Broadlands 509 593 593 593 2,730 - - Rainbow Mountain - - - - - - Decommissioned

Kawerau (Town) 137 139 139 139 740 - -

Kawerau (Caxton) 792 2,282 2,282 2,282 6,920 - -

Kawerau (Tasman)

2,076 2,014 2,014 2,014 6,930 - -

Te Teko 0 33 33 33 440 - - Edgecumbe (Dairy) 5,743 5,769 5,769 5,769 5,600 2012 Heater

Edgecumbe 2 (Town) 10 10 10 10 230 - -

Whakatane 3,351 3,061 3,061 3,061 2,730 2012 Filter Opotiki 150 214 216 218 850 - - Gisborne 2,829 3,333 3,435 3,562 6,235 - -



Delivery Point Commentary Kihikihi The station can meet the maximum predicted flow to FY24 and will not require upgrade. Waikeria The station can meet the maximum predicted flow to FY24 and will not require upgrade. Putaruru The station can meet the maximum predicted flow to FY24 and will not require upgrade. Tirau 1 (Dairy) The station can meet the maximum predicted flow to FY24 and will not require upgrade. Tirau 2 (Town) The station can meet the maximum predicted flow to FY24 and will not require upgrade. Okoroire Springs The station can meet the maximum predicted flow to FY24 and will not require upgrade.

There is no water bath heater at this station, but given the limited load, no installation is recommended.

Pyes Pa This station was constructed in FY07 and is anticipated to meet the required gas flow to FY24. It is located adjacent to a large residential development and a future industrial development site. This is a high growth area and the station demand should be monitored for increases above the expected trend.

Tauranga The station can meet the maximum predicted flow to FY24 and will not require upgrade. This is a high growth area and the station demand should be monitored for increases above the anticipated trend.

Mt. Maunganui The station can meet the maximum predicted flow to FY24 and will not require upgrade. Papamoa The station can meet the maximum predicted flow to FY24 and will not require upgrade. Te Puke The station meter capacity may be exceeded in FY22 if the forecast demand increase

occurs. It is planned to monitor this situation and reassess annually. Rangiuru The station can meet the maximum predicted flow to FY24 and will not require upgrade. Lichfield (Dairy) The station can meet the maximum predicted flow to FY24 and will not require upgrade. Tokoroa The station can meet the maximum predicted flow to FY24 and will not require upgrade. Kinleith (Paper Mill) No.1

Although pipework capacity is theoretically exceeded, actual operating data suggests that pipework performance is adequate at current flow rates. Upgrade is not scheduled.

Kinleith No.2 The station can meet the maximum predicted flow to FY24 and will not require upgrade. Rotorua The regulators at this station are operating above their design flow rate and it is planned

to replace these in FY14. Reporoa Although pipework capacity is theoretically exceeded, actual operating data suggests that

pipework performance is adequate at current flow rates. Upgrade is not scheduled. Taupo The station can meet the maximum predicted flow to FY24 and will not require upgrade. Broadlands The station can meet the maximum predicted flow to FY24 and will not require upgrade. Rainbow Mountain

This gate station has now been removed.

Kawerau (Town) The station can meet the maximum predicted flow to FY24 and will not require upgrade. Kawerau (Caxton)


Kawerau (Tasman)


Te Teko The station can meet the maximum predicted flow to FY24 and will not require upgrade. Edgecumbe (Dairy)

This dairy load is assumed to be flat although it has reached 6000 scmh in FY09 and may reach this level again. The water bath heater was analysed. Although heater capacity is theoretically exceeded, actual operating data suggests that heater performance is adequate at current flow rates. Upgrade is not scheduled.

Edgecumbe 2 (Town)


Whakatane The filtration capacity of the station is planned for upgrade in FY14. The station can then meet the maximum predicted flow to FY24 and will not require further upgrade.

Opotiki The station can meet the maximum predicted flow to FY24 and will not require upgrade. Gisborne The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Table 11: Bay of Plenty Delivery Point Commentary





Capacity (GJ/day)


FY14 FY19 FY24

Broadlands 960 2,628 2,585 2,542 Edgecumbe 5,088 4,668 4,563 4,459 Gisborne 2,691 1,664 1,043 422 Mt Maunganui 2,348 2,439 2,344 2,249 Tauranga 1,264 156 147 137 Kawerau 2,448 15,185 14,487 13,789 Kihikihi 720 11,583 11,039 10,495 Kinleith 11,008 3,355 3,067 2,779 Lichfield 2,052 18,698 18,385 18,072 Opotiki 103 2,618 2,587 2,556 Putaruru 365 18,623 17,836 17,049 Rangiuru 356 2,109 2,068 2,028 Reporoa 2,344 8,652 8,615 8,578 Rotorua 1,778 1,231 1,221 1,211 Taupo 598 4,428 4,359 4,289 Te Puke 332 2,595 2,515 2,435 Tirau 1,671 11,644 11,644 11,644 Tokoroa 472 18,380 17,556 16,731 Waikeria 110 21,742 20,764 19,785 Whakatane 2,596 2,341 2,215 2,090

The peak week identified in FY14 for this system was week commencing 16 September 2013 Capacity at Gisborne and Opotiki have been calculated with Kawerau Compressor Station running

Table 12: Bay of Plenty Pipeline Capacity Assessment



2.5 South System


Delivery Point Name

Actual Max Flow

(2013)




Station Max Flow

Capacity

Year of breach

of design

capacity

Comments

Matapu 0 2 2 2 50 - - Okaiawa

2,031 2,153 2,153 2,153 1,030 2012 Pipework velocity

Manaia 172 185 185 185 340 - - Hawera (Dairy) 3,757 3,134 3,134 3,134 3,800 - -

Hawera (Nova) 704 868 868 868 990 - -

Patea 163 249 271 298 140 2012 Heater Waverley 166 207 207 207 300 Waitotara 234 249 262 279 130 2012 Heater Wanganui 5,678 6,960 7,702 8,629 6,170 2014 Pipework

velocity/heater Kaitoke 163 177 187 199 280 - - Lake Alice 244 245 246 247 160 2012 Heater Kakariki 403 367 367 367 710 - - Marton 1,215 1,343 1,343 1,343 3,400 - - Flockhouse 0 2 2 2 160 - To be

removed Foxton 389 352 352 352 1,810 - - Levin 2,463 2,462 2,462 2,462 2,340 2014 Meter Kuku 0 4 4 4 50 - - Otaki 276 321 349 385 1,080 - - Te Horo 0 3 3 3 50 - - Waikanae 603 722 784 865 480 2012 Heater Paraparaumu 1,551 1,766 1,960 2,206 1,170 2012 Pipework

velocity Paekakariki 0 5 5 5 230 - - Pauatahanui No.2 0 5 5 5 50 - -

Pauatahanui 592 598 598 598 2,000 - - Waitangirua (for Tawa A and B)

22,241 22,508 23,053 23,753 33,690 - -

Waitangirua (Porirua) 3,301 3,341 3,422 3,526 4,233 - -

Belmont 13,312 13,473 13,799 14,218 18,310 - - Tawa B 3,646 3,690 3,779 3,894 11,130 - - Oroua Downs 216 242 259 280 290 - - Kairanga 12 10 10 10 50 - - Palmerston North 8,286 8,303 8,336 8,378 3,400 2012 Filter

Longburn 1,816 1,644 1,644 1,644 3,400 - - Fielding 1,635 1,376 1,376 1,376 3,400 - - Ashhurst 99 94 94 94 137 - - Pahiatua 1,792 1,795 1,802 1,811 1,500 2012 Filter Mangatainoka 458 518 576 650 1,510 - - Dannevirke 368 405 405 405 1,450 - - Takapau 751 652 652 652 1,510 - - Mangaroa 143 146 146 146 180 - - Hastings 1 11,533 11,579 11,672 11,789 10,830 2015 Heater and

Meter Hastings (Nova) 977 981 988 998 10,830 - -


Table 13: South System Delivery Point Analysis



Also indicated in Table 13 are the components (if any) that limit gate station capacity, anticipated to lead to a design breach within the planning period. These are discussed in more detail in Table 14 below.

Delivery Point Commentary Matapu The station can meet the maximum predicted flow to FY24 and will not require upgrade. Okaiawa This DP supplies a single consumer. Although pipework capacity is theoretically

exceeded, actual operating data suggests that pipework performance is adequate at current flow rates. No upgrade is scheduled.

Manaia The station can meet the maximum predicted flow to FY24 and will not require upgrade. Hawera (Dairy) & Hawera (Nova)

The major dairy load supplied from this DP does not coincide with the peak of the non-dairy load, so the bath heater does not need to meet a combined peak. The current water bath heater, installed in FY10 is forecast to be sufficient until FY24.

Patea Although heater capacity is theoretically exceeded, actual operating data suggests that heater performance is adequate at current flow rates. Upgrade has been deferred until FY15. An allowance of $200k is made for the work in the 10-year capex forecast.

Waverley The station can meet the maximum predicted flow to FY24 and will not require upgrade. Waitotara Although heater capacity is theoretically exceeded, actual operating data suggests that

heater performance is adequate at current flow rates. Upgrade has been deferred until FY16. An allowance of $200k is made for the work in the 10-year capex forecast.

Wanganui The pipework velocity at this station already exceeds design levels and the water bath heater will reach its design limit by FY16. It is recommended to replace pipework and heater during FY17. An allowance of $700k is made for replacement in the 10-year capex forecast.

Kaitoke The station can meet the maximum predicted flow to FY24 and will not require upgrade. Lake Alice Although heater capacity is theoretically exceeded, actual operating data determines

that an upgrade can be deferred until FY16. An allowance of $200k has been made for the work in the 10-year capex forecast.

Kakariki Although the station flow exceeded the meter capacity in FY11, the last two years station flows have significantly reduced to a level where the meter is adequate. It is proposed to monitor station demands over the coming years rather than upgrade the meter.

Marton The station can meet the maximum predicted flow to FY24 and will not require upgrade. Flockhouse The station can meet the maximum predicted flow to FY24 and will not require upgrade.

It is possible that this station will be decommissioned due to very low demand. Foxton The station can meet the maximum predicted flow to FY24 and will not require upgrade. Levin The station meter will exceed its design condition by FY13. However, significant growth

is not anticipated and the flow rate for the meter is only marginally high. Hence, the station will be monitored over the coming years prior to a decision on meter upgrade.

Kuku The station can meet the maximum predicted flow to FY24 and will not require upgrade. Otaki The station can meet the maximum predicted flow to FY24 and will not require upgrade. Te Horo The station can meet the maximum predicted flow to FY24 and will not require upgrade. Waikanae Although heater capacity is theoretically exceeded, actual operating data suggests that

heater performance is adequate at current flow rates. Upgrade has been deferred until FY16. An allowance of $200k is made for the work in the 10-year capex forecast.

Paraparaumu Although pipework capacity is theoretically exceeded, actual operating data suggests that pipework performance is adequate at current flow rates. Upgrade has been deferred until FY17. An allowance of $50k is made for the work in the 10-year capex forecast.

Paekakariki The station can meet the maximum predicted flow to FY24 and will not require upgrade. Pauatahanui No.2 The station can meet the maximum predicted flow to FY24 and will not require upgrade. Pauatahanui This station was upgraded in FY13. Waitangirua 1 DP (For Tawa A and B)


Waitangirua 3 DP (Porirua)


Belmont The station can meet the maximum predicted flow to FY24 and will not require upgrade. Tawa B The station can meet the maximum predicted flow to FY24 and will not require upgrade. Oroua Downs This station was upgraded with a new heater in FY13 and can now meet the maximum

predicted flow to FY24 and will not require further upgrade.



Kairanga The major gas user at Kairanga has ceased using gas as a process load and the remaining demand comprises only minor residential load. The existing equipment can meet this load. Hence, no investment is planned.

Palmerston North Although filter capacity is theoretically exceeded, it is planned to investigate the filter performance before consideration of upgrade. Growth at this location is currently flat.

Longburn The station can meet the maximum predicted flow to FY24 and will not require upgrade. Fielding The station can meet the maximum predicted flow to FY24 and will not require upgrade. Ashhurst A new electric heater was installed at this site in FY11. The station can now meet the

maximum predicted flow to FY24 and will not require further upgrade. Pahiatua The station filter capacity has been exceeded and an allowance of $100k is made in

FY16 for upgrade. The dairy factory has indicated the potential for a significant load increase at this gate station during FY15 and the filter upgrade is planned to occur at the same time. A dairy upgrade allowance of $1.2M has been made in FY15.

Mangatainoka The station can meet the maximum predicted flow to FY24 and will not require upgrade. Dannevirke The station can meet the maximum predicted flow to FY24 and will not require upgrade. Takapau The station can meet the maximum predicted flow to FY24 and will not require upgrade. Mangaroa The station can meet the maximum predicted flow to FY24 and will not require upgrade Hastings 1 and Hastings (Nova)

The water bath heater is at the limit of its design capacity. It is recommended to monitor the outlet temperature over the coming years to assess if an upgrade is necessary. The regulators were replaced in FY12. The meters have exceeded their design capacity and will be replaced in FY15.

Table 14: South System Delivery Point Commentary


Delivery Point

Aggregate Contractual

Capacity (GJ/day)


FY14 FY19 FY24

Ashhurst 134 7,122 6,122 5,123 Belmont 6,778 6,013 4,976 3,938 Dannevirke 341 7,936 6,746 5,557 Feilding 960 3,778 3,591 3,403 Foxton 146 6,120 5,237 4,355 Hastings 10,024 2,009 1,019 30 Hawera 1,495 4,311 3,615 2,918 Kaitoki 100 3,996 3,967 3,939 Kakariki 356 6,145 5,508 4,870 Lake Alice 151 3,396 3,383 3,370 Levin 1,317 5,172 5,038 4,903 Longburn 779 6,312 6,071 5,830 Manaia 98 3,889 3,881 3,873 Mangaroa 104 8,176 6,997 5,818 Mangatainoka 115 885 798 710 Marton 1,051 4,647 3,856 3,065 Okaiawa 1,680 210 206 202 Otaki 118 6,373 5,434 4,496 Pahiatua 430 3,021 928 882 Palmerston North 5,007 2,881 2,604 2,326 Paraparaumu 642 5,872 5,048 4,223 Patea 122 5,615 4,864 4,113 Takapau 600 6,777 5,798 4,818



Tawa 12,545 No Spare Capacity No Spare Capacity No Spare Capacity2 Waikanae 220 5,785 4,942 4,099 Greater Waitangirua 1,917 5,654 4,770 3,885 Waitotara 135 5,965 5,341 4,716 Whanganui 3,821 4,352 3,595 2,838 Waverley 154 3,301 3,282 3,263

The peak week identified in FY14 for this system was week commencing 08 July 2013

Table 15: South System Pipeline Capacity Assessment

The issue of lack of spare capacity at Tawa is addressed in section 6.3.4 of the 2013 AMP2. The issue of lack of spare capacity at Hastings by FY24 will be further monitored over the next period before making an investment decision.

2.6 Frankley Road to Kapuni System


Delivery Point Name

Actual Max Flow

(2013)




Station Max Flow

Capacity

Year of breach

of design

capacity

Comments

Stratford Power Station 49,591 52,083 52,083 52,083 62,500 - -

Stratford Storage 33,188 55,360 55,360 55,360 177,083 - - Taranaki Combined Cycle (TCC) Power Station

69,639 69,640 69,640 69,640 110,530 - -

Ammonia Urea Plant 22,082 23,180 23,180 23,180 20,000 2012 Heater

Kapuni 196 271 271 271 980 - -


Table 16: Frankley Road to Kapuni System Delivery Point Analysis

Also indicated in Table 16 are the components (if any) that limit gate station capacity anticipated to lead to a design breach within the planning period. These are discussed in more detail in Table 17 below.

Delivery Point Commentary Stratford Power Station

There are no regulators or heaters for this delivery point and the supply is directly from the transmission system. The delivery point was sized for the power station and it is not anticipated it will need upgrading during the planning period to FY24.

Stratford Storage

This station was commissioned as a bi-directional DP in FY14. There are no regulators or heaters and the station is connected directly to the transmission system. The new station’s capacity is expected to be sufficient during the planning period to 2024.

Taranaki Combined Cycle (TCC) Power Station

This gate station was sized for the power station demand and is not expected to need upgrading during the planning period to FY24.

Ammonia Urea DP

Although the heater capacity (together with the regulators) are operating near their limits, demand is not forecast to increase. Therefore equipment performance will continue to be monitored before any upgrade is considered.

2 Coating failure and Cathodic protection performance issue in T1 area. The pipeline is critical for maintaining supply to Wellington and is currently unpiggable. A piggability study is due for completion in FY14 and improvement modifications are planned for FY15 and FY16.



Kapuni (Lactose) DP


Table 17: Frankley Road to Kapuni System Delivery Point Commentary


Delivery Point Aggregate

Contractual Capacity (GJ/day)


FY14 FY19 FY24

Ammonia Urea Plant (AUP) 22,500 13,998 13,998 13,998 Kapuni (Lactose) 173 12,752 12,752 12,752 TCC Power Station + Stratford Power Station + Stratford Storage 170,000 55,228 55,228 55,228

The peak week identified in FY14 for this system was week commencing 17 February 2014

Table 18: Frankley Road to Kapuni Pipeline Capacity Assessment

2.7 Other Systems


Delivery Point Name

Actual Max Flow

(2013)




Station Max Flow Capacity

Year of breach of

design capacity

Comments

Huntly 491 547 547 547 730 - - Ngaruawahia 67 82 91 103 130 - - Pirongia 27 32 35 39 50 - - Te Awamutu North (Town) 439 631 631 631 860 - -

Otorohanga 152 174 174 174 220 - - Te Kuiti North 317 368 368 368 450 - -

Te Kuiti South 968 910 910 910 1,050 - -

Oakura 114 87 87 87 50 2014 No Heater Okato 54 76 76 76 190 - - Pungarehu No.2 1 2 2 2 50 - -

Pungarehu No.1 0 3 3 3 50 - -

Opunake 87 101 101 101 650 - -


Table 19: Other Systems Delivery Point Analysis

Also indicated in Table 19 are the components (if any) that limit gate station capacity anticipated to lead to a design breach within the planning period. These are discussed in more detail in Table 20 below.

Delivery Point Commentary



Huntly The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Ngaruawahia The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Pirongia There is no water bath heater at this station. The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Te Awamutu North (Town)


Otorohanga The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Te Kuiti North The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Te Kuiti South There is no water bath heater at this station. The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Oakura An assessment of this station was undertaken and it is recommended to install a new heater in FY16. An allowance of $200k is made for the work in the 10-year Capex forecast.

Okato The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Pungarehu No.2 The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Pungarehu No.1 The station can meet the maximum predicted flow to FY24 and will not require upgrade. There is no water bath heater at this station, but given the limited load, no installation is recommended.

Opunake The station can meet the maximum predicted flow to FY24 and will not require upgrade.

Table 20: Other Systems Delivery Point Commentary

2.8 Summary of Significant Changes to Capacity Assessment

The significant change in the capacity assessment from the 2013 AMP is that it is now assumed that demand at the aging thermal power generating plant at Otahuhu B delivery point will reduce to zero by FY24. This assumption is reflected in the North System FY24 predicted delivery point maximum flow in Table 1, delivery point commentary in Table 2 and the pipeline capacity assessment in Table 3.

2.9 Asset Relocations

Waikanae Expressway (also known as M2PP) NZTA are planning to construct a new highway through Waikanae with a new road bridge. The new alignment affects the existing pipelines and delivery point in Waikanae. It is planned to realign the pipelines and relocate the delivery point. Construction was originally scheduled in FY14 but the project timing has changed and construction is now scheduled to commence during FY15. The cost of this work will be fully recovered from NZTA by way of capital contribution.

Transmission Gully (Wellington New Expressway) NZTA have requested Vector to evaluate up to 30 separate locations where the proposed new road route will cross existing pipelines. The number of locations where the pipelines will need to be relocated is not yet known. Construction was originally anticipated over FY16 – FY23 but the project timing has changed and construction is now anticipated over FY15 – FY17. The cost of this work will be fully recovered from NZTA by way of capital contribution.

Soldiers Road, Pyes Pa NZTA have commissioned Vector to undertake concept design for relocation of 700m of pipeline. The NZTA programme for the work has been deferred and construction is anticipated in FY16. The cost of this work will be fully recovered from NZTA by way of capital contribution.



2.10 System Growth

All system growth forecasts including known large new or increased demands to be supplied from existing delivery points for FY15 period are included in sections 2.1 to 2.7 above.

2.11 Consumer Connections

No new consumer connections for FY15 have been identified resulting in FY15 consumer connections expenditure forecast reducing to zero. Due to the potential number of new consumer connections proposed and considered each year, and based on the historical expenditure trend for new connections, a forecast of $1.0m per annum has been made for FY16 - FY24 to support new connections which are outside the normal demand growth trends identified. In addition to the above information concerning new customer connections, there is the potential for gas producers to request interconnections to the gas transmission system. If an interconnection contract is signed with Vector, then a new welded connection will be constructed, where Vector will own some or all of the assets. The expenditure forecast of $1.0m per annum for FY16 – FY24 for customer connections also makes allowance for any required new welded points.

3. UPDATE ON ASSET MAINTENANCE, RENEWAL AND REPLACEMENT

This section discusses aspects that have led to material changes to Vector’s asset maintenance, renewal and replacement practices previously described in section 6 of the 2013 AMP.

3.1 Flexflo Regulator Obsolescence

Since publication of the 2013 AMP, Vector has received notification from the manufacturer that Flexflo Model 80 Regulators sizes 1” – 3” are now obsolete and that replacement parts will only be available to the end of 2014. Vector has 41 delivery points where this type of regulator is in service. Vector is investigating if suitable replacements parts can be sourced from non-OEM manufacturers but this is considered unlikely. A reserve inventory of OEM replacement parts will be procured and the existing regulator replacement programme will be adjusted to accommodate replacement of the obsolete regulators within the exiting expenditure forecast for asset replacement and renewal.

3.2 Bruce McLaren Delivery Point

Section 6.5.1 of the 2013 AMP identified that due to urban encroachment around the Bruce McLaren delivery point, safety margins provided by distance from the station have been reduced sufficiently such that modifications are required for risk reduction. A number of alternative solutions have been considered including to relocate, modify or remove the delivery point completely. The 2013 AMP made provision for a solution involving the installation of a new gas distribution pipeline to allow the complete removal of the delivery point. Further investigation of the issues associated with the hazardous area compliance for the delivery point have confirmed that modification of the existing installation is likely to be feasible and more economical to achieve than the installation of a new gas



distribution pipeline and removal of the delivery point. The cost of the modification work will be accommodated in the capex forecast for asset replacement and renewal.

3.3 Whitecliffs Pipeline Relocation

Expenditure related to the potential Whitecliffs relocation has not been included in this update as, based on the most recent technical assessments, the Whitecliffs relocation is outside the plan period.

4. UPDATE ON LEGISLATIVE REQUIREMENTS There have been no legislative changes since the publication of the 2013 AMP that have had material impact on the information presented. Changes to Health and Safety legislation are, however, currently in progress. These are anticipated to become law in FY15 and are likely to have an impact on operational expenditure. There are two key aspects of the law that are changing. Firstly, the Health and Safety in Employment Act 1992 is being replaced and, secondly, new regulations are being developed relating to the management of major hazard facilities (MHF). Vector has robust health and safety systems in place via the corporate HSE Management System and the Pipeline Management System supporting AS2885.3 – 2012 under the Health and Safety in Employment (Pipelines) Regulations 1999. The impact of the new legislation is not, therefore, expected to be as significant as it could be. Nevertheless, there will be a requirement for amendments to Vector safety systems due to changed recording and reporting regimes under the new Act and the likely requirement for a new Safety Case under the MHF regulations. A one off increase in compliance costs is therefore likely in order to undertake the changes, but the extent is unknown until the legislation is in force. There may also be a fee for WorkSafe Safety Case review which, based on current regulations may be of the order of $75,000 - $100,000. No change has been made to the expenditure forecast in this AMP update to accommodate these requirements. When more details of the timing and implications of these changes are known future expenditure forecasts will be amended accordingly.

5. UPDATE ON ASSET MANAGEMENT PRACTICE Although a number of initiatives to improve overall asset management maturity were initiated over the course of the last year, the majority of these initiatives are longer term programmes that will not immediately result in a material change to the overall Asset Management Maturity Assessment Tool (AMMAT) score provided in the 2013 AMP. These initiatives will continue to be progressed and tracked over the next reporting period, with the AMP being updated as required during the next review cycle.

6. PROJECT PROGRAMME UPDATE This section presents the updated list of projects and programmes on the Vector gas transmission pipeline capital works programme over the 10-year planning period. These



changes reflect the updated planning as influenced by system development planning (see section 2) and asset maintenance, renewal and replacement (see section 3). The following table shows the target completion dates of these projects and programmes, the previous target completion dates and the reasons for any changes proposed.

2013 AMP

Section

2013 AMP

Forecast Project Description

AMP Update

Forecast Reason For Change

5.6 FY14 Harrisville (bath heater, meter)

FY15 Now forecast for FY15 due to project delays and change in scope

5.6 n/a Tuakau (station upgrade) FY15 Large increase in consumer demand identified

5.6 FY16 Warkworth No2 (Regulator)

FY16 No change

5.7 FY18 Temple View (meters) removed Not now required

5.7 n/a Horotiu (station upgrade) FY15 Large increase in consumer demand identified

5.7 n/a Tatuanui (station upgrade) FY15 Large increase in consumer demand identified

5.9 FY14 Whakatane (filter) FY14 completed

5.9 FY14 Rotorua (regulator) FY14 completed

5.10 FY15 Patea (heater) FY15 No change

5.10 FY16 Waitotara (heater) FY16 No change

5.10 FY17 Wanganui (pipework and heater)

FY17 No change

5.10 FY16 Lake Alice (heater) FY16 No change

5.10 FY16 Pahiatua (filter) FY16 No change

5.10 n/a Pahiatua (station upgrade) FY15 Large increase in consumer demand identified

5.10 FY16 Waikanae (heater) FY16 No change

5.10 FY17 Paraparaumu (pipework) FY17 No change

5.10 n/a Hastings (meters) FY15 Meters will exceed design capacity

5.11 FY16 Oakura (heater) FY16 No change

5.12 FY14-FY15 Waikanae Expressway FY15 Deferred from FY14 due to NZTA project timing change.

5.12 FY14-FY23 Transmission Gully FY15-FY17 Now forecast FY15 - FY17 due to NZTA project timing change.

5.12 FY14-FY23 Other NZTA FY14-FY23 No change

5.13 FY14-FY23 Assumed Growth FY16-FY24 General provision for FY15 removed as specific consumer connection projects have now been identified for FY15. General provision will apply for FY16-FY24.

Table 21: System Development Planning Projects and programmes

2013 AMP

Section 2013 AMP Forecast Project or Programme Description AMP

Update Reason For Change

6.3.2 FY14-FY23 Pipeline signage upgrades FY15-FY24 Ongoing programme continues into FY24

6.3.4 FY14-FY23 Pipeline - integrity FY15-FY24 Ongoing programme continues into FY24



2013 AMP Section

2013 AMP Forecast Project or Programme Description AMP

Update Reason For Change

6.3.6 FY14-FY23 Special crossings FY15-FY24 Ongoing programme continues into FY24

6.3.7 FY14-FY23 Rectifier replacement FY15-FY24 Ongoing programme continues into FY24

6.3.7 FY14-FY23 New rectifier units FY15-FY24 Ongoing programme continues into FY24

6.4.2.1 FY14-FY23 Gas turbines FY15-FY24 Ongoing programme continues into FY24

6.4.2.2 FY14-FY23 Centrifugal compressor FY15-FY24 Ongoing programme continues into FY24

6.4.2.3 FY14-FY23 Reciprocating engine controls FY14-FY23 No change – programme complete by FY23

6.4.2.3 FY14-FY23 Reciprocating engine other FY14-FY23 Ongoing programme continues into FY24

6.4.2.5 FY14-FY23 Gas coolers FY14-FY23 Ongoing programme continues into FY24

6.4.2.6 FY14-FY23 Compressor fire and gas systems FY14-FY23 Ongoing programme continues into FY24

6.4.2.7 FY14-FY23 Compressor oil storage FY14-FY23 Ongoing programme continues into FY24

6.5.1 FY14-FY23 Stations FY14-FY23 Ongoing programme continues into FY24

6.5.2 FY14-FY23 MLVs FY14-FY23 Ongoing programme continues into FY24

6.5.3 FY14-FY23 Heating Systems FY14-FY23 Ongoing programme continues into FY24

6.5.4 FY14-FY23 Odorisation Plants FY14-FY23 Ongoing programme continues into FY24

6.5.6 FY14-FY23 Metering Systems FY14-FY23 Ongoing programme continues into FY24

6.5.7 FY14-FY23 SCADA and Communications FY14-FY23 Ongoing programme continues into FY24

6.5.8 FY14-FY23 Gas Chromatographs FY14-FY23 Ongoing programme continues into FY24

6.5.9 FY14-FY23 PIG Launchers and Receivers FY14-FY23 Ongoing programme continues into FY24

6.5.10 FY14-FY23 Pressure Regulators FY14-FY23 Ongoing programme continues into FY24

6.5.11 FY14-FY23 Pressure Safety Valves FY14-FY23 Ongoing programme continues into FY24

6.5.13 FY14-FY23 Isolation Valves FY14-FY23 Ongoing programme continues into FY24

6.5.14 FY14-FY23 Filters FY14-FY23 Ongoing programme continues into FY24

6.5.16 FY14-FY23 Station Ancillaries FY14-FY23 Ongoing programme continues into FY24

6.6 FY14-FY23 Critical Spares & Equipment FY14-FY23 Ongoing programme continues into FY24

6.7 FY14-FY23 Plant and Equipment FY14-FY23 Ongoing programme continues into FY24

6.7 FY14-FY23 Measurement Laboratory FY14-FY23 Ongoing programme continues into FY24

Table 22: Asset Maintenance, Renewal and Replacement Projects and Programmes



7. CAPITAL AND OPERATIONAL EXPENDITURE FORECAST UPDATE

This section describes the capex and direct opex forecasts for the gas transmission pipeline assets for the next 10 year period (FY14-FY24), and provides a comparison with the previous 10 year forecast prepared and disclosed in Section 9 of the 2013 AMP (disclosed in September 2013). These forecasts are applicable to the development, maintenance, renewal, replacement and management of gas transmission pipeline assets.

All values are presented in 2015 constant price dollars. For reference and comparison the values in the 2013 AMP have been escalated to 2015 constant price dollars. The year references indicate the end of the Vector financial year and all figures are in $000.

7.1 Capital Expenditure Capital Expenditure FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

Consumer connection 1,027 1,027 1,027 1,027 1,027 1,027 1,027 1,027 1,027

System growth 205 1,130 770 411 0 0 0 0 0

Replacement and renewal 8,492 10,797 10,905 7,101 10,854 9,314 7,640 7,948 6,983

Asset relocations 3,183 2,567 2,567 2,567 2,567 2,567 2,567 2,567 2,567

Expenditure on network assets 12,908 15,521 15,269 11,105 14,448 12,908 11,234 11,542 10,577

Non-network assets3 3,446 3,205 2,989 2,444 2,844 3,281 2,516 2,356 2,356

Expenditure on assets 16,353 18,726 18,258 13,550 17,292 16,189 13,750 13,898 12,933

Table 23 : 2013 AMP capex forecast

Capital Expenditure FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

Consumer connection 0 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

System growth 3,600 1,150 750 0 0 0 0 0 0 0

Replacement and renewal 8,430 10,515 10,620 6,915 10,570 9,070 7,440 7,740 6,800 6,190

Asset relocations 10,450 8,268 3,500 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Expenditure on network assets 22,480 20,933 15,870 8,915 12,570 11,070 9,440 9,740 8,800 8,190

Non-network assets 1,842 2,296 1,240 1,229 1,759 2,560 1,182 1,147 1,328 1,205

Expenditure on assets 24,322 23,229 17,110 10,144 14,329 13,630 10,622 10,887 10,128 9,395

Table 24 : AMP update capex forecast

Capital Expenditure FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Total

Consumer connection -1,027 -27 -27 -27 -27 -27 -27 -27 -27 -1,242

System growth 3,395 20 -20 -411 0 0 0 0 0 2,984

Replacement and renewal -62 -282 -285 -186 -284 -244 -200 -208 -183 -1,933

Asset relocations 7,267 5,701 933 -1,567 -1,567 -1,567 -1,567 -1,567 -1,567 4,498

Expenditure on network assets 9,572 5,413 601 -2,190 -1,878 -1,838 -1,794 -1,802 -1,777 4,308

Non-network assets -1,603 -909 -1,749 -1,216 -1,085 -722 -1,335 -1,209 -1,028 -10,856

Expenditure on assets 7,969 4,503 -1,148 -3,406 -2,963 -2,559 -3,128 -3,011 -2,805 -6,548

Table 25 : Variances between 2013 AMP and AMP update capex forecasts

3 Figures adjusted to include corporate shared services component



7.2 Operational Expenditure Opex FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

Service interruptions and emergencies 946 899 899 899 993 1,040 993 899 923

Routine & corrective maint & inspection 8,967 8,521 8,521 8,521 9,413 9,859 9,413 8,521 8,744

Replace & renewal - - - - - - - - -

Network opex 9,913 9,421 9,421 9,421 10,406 10,899 10,406 9,421 9,667

System operations 1,160 1,125 1,125 1,125 1,194 1,229 1,194 1,125 1,142

Network support 12,565 12,535 12,535 12,535 12,596 12,626 12,596 12,535 12,550

Business support 9,580 9,571 9,571 9,571 9,588 9,596 9,588 9,571 9,576

Compressor fuel 4,098 4,098 4,098 4,098 4,098 4,098 4,098 4,098 4,098

Land management and associated activity 717 680 680 680 752 788 752 680 699

Non network opex 28,120 28,010 28,010 28,010 28,228 28,336 28,228 28,010 28,064

Total opex 38,033 37,431 37,431 37,431 38,634 39,236 38,634 37,431 37,731

Table 26 : 2013 AMP opex forecast

Opex FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

Service interruptions and emergencies 679 703 703 703 703 703 703 703 703 703

Routine & corrective maint & inspection 10,880 10,819 10,819 10,819 12,023 12,624 12,023 10,819 11,120 11,624

Replace & renewal - - - - - - - - - -

Network opex 11,559 11,522 11,522 11,522 12,726 13,328 12,726 11,522 11,823 12,327

System operations 757 632 632 632 632 632 632 632 632 632

Network support 6,226 5,951 5,951 5,951 5,951 5,951 5,951 5,951 5,951 5,951

Business support 8,035 8,035 8,035 8,035 8,035 8,035 8,035 8,035 8,035 8,035

Compressor fuel 3,926 4,601 4,601 4,601 4,601 4,601 4,601 4,601 4,601 4,601

Land management and associated activity 91 144 144 144 144 144 144 144 144 144

Non network opex 19,036 19,364 19,364 19,364 19,364 19,364 19,364 19,364 19,364 19,364

Total Opex 30,595 30,887 30,887 30,887 32,090 32,692 32,090 30,887 31,188 31,691

Table 27 : AMP update opex forecast

Opex FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Total

Service interruptions and emergencies -267 -196 -196 -196 -289 -337 -289 -196 -219 -2,186

Routine & corrective maint & inspection 1,913 2,298 2,298 2,298 2,609 2,765 2,609 2,298 2,376 21,464

Replace & renewal 0 0 0 0 0 0 0 0 0 0

Network opex 1,646 2,102 2,102 2,102 2,320 2,428 2,320 2,102 2,156 19,278

System operations -403 -493 -493 -493 -562 -597 -562 -493 -510 -4,605

Network support -6,339 -6,584 -6,584 -6,584 -6,645 -6,675 -6,645 -6,584 -6,599 -59,241

Business support -1,544 -1,536 -1,536 -1,536 -1,553 -1,560 -1,553 -1,536 -1,540 -13,894

Compressor fuel -172 503 503 503 503 503 503 503 503 3,855

Land management & associated activity -625 -536 -536 -536 -607 -643 -607 -536 -554 -5,181

Non network opex -9,084 -8,646 -8,646 -8,646 -8,864 -8,972 -8,864 -8,646 -8,700 -79,067

Total Opex -7,438 -6,544 -6,544 -6,544 -6,544 -6,544 -6,544 -6,544 -6,544 -59,789

Table 28: Variance between 2013 AMP and AMP update opex forecasts



7.3 Explanation of Significant Changes

This section highlights the significant changes between the 2013 disclosed expenditure forecasts and AMP update expenditure forecasts for 9-year period FY15–FY23.

7.3.1 Capital Expenditure

$1.242m decrease in consumer connection for FY15 as no new consumer connections identified. Forecast of $1.0m for FY16–FY24 based on historical trend for yet unidentified new consumer connections.

$2.984m increase in the system growth category for FY15 due to specific

requirements for large consumer demand growth being identified which will be supplied from existing delivery points.

$1.993m decrease in the asset replacement and renewal category due to project portfolio contingency reduction.

$4.498m increase in the asset relocation category due to deferment of FY14

expenditure associated with NZTA roading projects.

$10.856m decrease in the non-network assets category due to a reduction in the allocation of corporate IT and reduced IT expenditure directly attributable to gas transmission following a review of IT capex requirements.

7.3.2 Operational Expenditure

The net change in total opex over the 9-year period FY15-FY23 is a reduction of $59.8. This is due to improved recovery of rechargeable activity, reduced share of intercompany allocated costs, an erroneous inclusion of unaccounted for gas in the prior disclosure, reduced insurance premiums and lower consultancy costs.


Gas Transmission Asset Management Plan Update

Information Disclosure 2014

Appendix 1 – Schedule 11a Report on Forecast Capital Expenditure


Company Name

AMP Planning Period

SCHEDULE 11a: REPORT ON FORECAST CAPITAL EXPENDITURE

sch ref

7 Current Year CY CY+1 CY+2 CY+3 CY+4 CY+5 CY+6 CY+7 CY+8 CY+9 CY+10

8 for year ended 30 Jun 14 30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19 30 Jun 20 30 Jun 21 30 Jun 22 30 Jun 23 30 Jun 24

9 11a(i): Expenditure on Assets Forecast $000 (nominal dollars)

10 Consumer connection 1,519 ‐ 999 1,030 1,056 1,082 1,141 1,170 1,199 1,229 1,259

11 System growth 2,131 3,500 1,149 773 ‐ ‐ ‐ ‐ ‐ ‐ ‐

12 Asset replacement and renewal 8,070 8,219 10,538 10,970 7,322 11,471 10,349 8,701 9,278 8,355 7,796

13 Asset relocations 2,797 10,103 8,217 3,585 1,050 1,076 1,141 1,170 1,199 1,229 1,259

14 Reliabil ity, safety and environment:

15 Quality of supply ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

16 Legislative and regulatory ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

17 Other Reliability, Safety and Environment ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

18 Total reliability, safety and environment ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

19 Expenditure on network assets 14,517 21,822 20,903 16,358 9,428 13,629 12,631 11,041 11,676 10,813 10,314

20 Non‐network assets 1,447 1,828 2,341 1,304 1,324 1,943 2,921 1,382 1,375 1,632 1,518

21 Expenditure on assets 15,964 23,650 23,244 17,662 10,752 15,572 15,552 12,423 13,051 12,445 11,832

2223 plus Cost of financing 420 673 634 467 265 378 361 308 325 305 292

24 less Value of capital contributions 2,602 10,125 8,500 3,708 1,086 1,113 1,172 1,201 1,231 1,262 1,293

25 plus Value of vested assets ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

26 Capital expenditure forecast 13,782 14,198 15,378 14,421 9,931 14,837 14,741 11,530 12,145 11,488 10,831

2728 Value of Commissioned assets 10,119 13,331 19,874 14,807 10,197 15,236 14,797 11,555 12,170 11,517 10,857

29



32 $000 (in constant prices)33 Consumer connection 1,519 ‐ 947 947 947 947 974 974 974 974 974

34 System growth 2,131 3,408 1,089 710 ‐ ‐ ‐ ‐ ‐ ‐ ‐

35 Asset replacement and renewal 8,071 8,006 9,983 10,085 6,566 10,037 8,833 7,245 7,538 6,622 6,028

36 Asset relocations 2,798 9,839 7,784 3,295 941 941 974 974 974 974 974






42 Expenditure on network assets 14,519 21,253 19,803 15,037 8,454 11,925 10,781 9,193 9,486 8,570 7,976

43 Non‐network assets 1,446 1,780 2,218 1,199 1,187 1,700 2,493 1,151 1,117 1,293 1,174

44 Expenditure on assets 15,965 23,033 22,021 16,236 9,641 13,625 13,274 10,344 10,603 9,863 9,150

45 Subcomponents of expenditure on assets (where known)46 Research and development ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Vector 1 July 2014 – 30 June 2024

This schedule requires a breakdown of forecast expenditure on assets for the current disclosure year and a 10 year planning period. The forecasts should be consistent with the supporting information set out in the AMP. The forecast is to be expressed in both constant price and nominal dollar terms. Also required is

a forecast of the value of commissioned assets (i.e., the value of RAB additions)

GTBs must provide explanatory comment on the difference between constant price and nominal dollar forecasts of expenditure on assets in Schedule 14a (Mandatory Explanatory Notes).

This information is not part of audited disclosure information.




56 Difference between nominal and constant price forecasts $000

57 Consumer connection ‐ ‐ 52 83 109 135 167 196 225 255 285

58 System growth ‐ 92 60 63 ‐ ‐ ‐ ‐ ‐ ‐ ‐

59 Asset replacement and renewal (1) 213 555 885 756 1,434 1,516 1,456 1,740 1,733 1,768

60 Asset relocations (1) 264 433 290 109 135 167 196 225 255 285






66 Expenditure on network assets (2) 569 1,100 1,321 974 1,704 1,850 1,848 2,190 2,243 2,338

67 Non‐network assets 1 48 123 105 137 243 428 231 258 339 344

68 Expenditure on assets (1) 617 1,223 1,426 1,111 1,947 2,278 2,079 2,448 2,582 2,682

69 Current Year CY CY+1 CY+2 CY+3 CY+4 CY+570 11a(ii): Consumer Connection for year ended 30 Jun 14 30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19

71 Consumer types defined by GTB* $000 (in constant prices)72 New Connections/Load Increase 1,519 ‐ 947 947 947 947

73

74

75

76

77 * include additional rows if needed

78 Consumer connection expenditure 1,519 ‐ 947 947 947 947

79 less Capital contributions funding consumer connection 19 ‐ ‐ ‐ ‐ ‐

80 Consumer connection less capital contributions 1,500 ‐ 947 947 947 947

81 11a(iii): System Growth82 Pipes ‐ ‐ ‐ ‐ ‐ ‐

83 Compressor stations ‐ ‐ ‐ ‐ ‐ ‐

84 Other stations 2,131 3,408 1,089 710 ‐ ‐

85 SCADA and communications ‐ ‐ ‐ ‐ ‐ ‐

86 Special crossings ‐ ‐ ‐ ‐ ‐ ‐

87 System growth expenditure 2,131 3,408 1,089 710 ‐ ‐

88 less Capital contributions funding system growth ‐ ‐ ‐ ‐ ‐ ‐

89 System growth less capital contributions 2,131 3,408 1,089 710 ‐ ‐


97 Current Year CY CY+1 CY+2 CY+3 CY+4 CY+5

98 11a(iv): Asset Replacement and Renewalfor year ended 30 Jun 14 30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19

99

100 Pipes 1,740 1,282 1,092 997 902 997

Compressor stations 2,737 1,415 3,693 3,124 1,244 2,336

101 Other stations 2,278 3,466 3,181 3,798 2,996 3,133

102 SCADA and communications 326 190 190 190 190 1,899

103 Special crossings 2 95 95 285 95 285

104 Components of stations (where known)105 Main‐l ine valves 83 190 285 190 190 190

106 Heating system 284 570 570 475 285 285

107 Odorisation plants 193 ‐ ‐ 285 ‐ 285

108 Coalescers ‐ ‐ ‐ ‐ ‐ ‐

109 Metering system 294 665 688 589 475 475

110 Cathodic protection 96 133 104 152 104 152

111 Chromatographs 38 ‐ 85 ‐ 85 ‐

112 Asset replacement and renewal expenditure 8,071 8,006 9,983 10,085 6,566 10,037

113 less Capital contributions funding asset replacement and renewal ‐ ‐ ‐ ‐ ‐ ‐

114 Asset replacement and renewal less capital contributions 8,071 8,006 9,983 10,085 6,566 10,037

115 11a(v): Asset Relocations116 Project or programme*117 Waikanae Expressway 2,271 5,649 1,194 ‐ ‐ ‐

118 Transmission Gully 65 3,766 5,649 2,354 ‐ ‐

119

120

121

122 * include additional rows if needed123 All other asset relocations projects or programmes 462 424 941 941 941 941

124 Asset relocations expenditure 2,798 9,839 7,784 3,295 941 941

125 less Capital contributions funding asset relocations 2,582 9,860 8,052 3,408 974 974

126 Asset Relocations less capital contributions 216 (21) (268) (113) (33) (33)

127 11a(vi): Quality of Supply128 Project or programme*129

130

131

132

133

134 * include additional rows if needed135 All other quality of supply projects or programmes

136 Quality of supply expenditure ‐ ‐ ‐ ‐ ‐ ‐

137 less Capital contributions funding quality of supply

138 Quality of supply less capital contributions ‐ ‐ ‐ ‐ ‐ ‐

139 11a(vii): Legislative and Regulatory140 Project or programme*141 [Description of material project or programme]

142 [Description of material project or programme]




146 * include additional rows if needed147 All other legislative and regulatory projects or programmes

148 Legislative and regulatory expenditure ‐ ‐ ‐ ‐ ‐ ‐

149 less Capital contributions funding legislative and regulatory

150 Legislative and regulatory less capital contributions ‐ ‐ ‐ ‐ ‐ ‐

$000 (in constant prices)


158 Current Year CY CY+1 CY+2 CY+3 CY+4 CY+5

159 11a(viii): Other Reliability, Safety and Environmefor year ended 30 Jun 14 30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19

160 Project or programme* $000 (in constant prices)161

162

163

164

165

166 * include additional rows if needed167 All other reliabil ity, safety and environment projects or programmes

168 Other reliability, safety and environment total ‐ ‐ ‐ ‐ ‐ ‐

169 less Capital contributions funding other reliability, safety and environment

170 Other reliability, safety and environment less capital contributions ‐ ‐ ‐ ‐ ‐ ‐

171

172

173 11a(ix): Non‐Network Assets174 Routine expenditure175 Project or programme* $000 (in constant prices)176

177

178

179

180

181 * include additional rows if needed182 All other routine expenditure projects or programmes 1,192 1,482 1,920 901 889 1,076

183 Routine expenditure 1,192 1,482 1,920 901 889 1,076

184 Atypical expenditure185 Project or programme*186

187

188

189

190

191 * include additional rows if needed192 All other atypical expenditure projects or programmes 254 298 298 298 298 624

193 Atypical expenditure 254 298 298 298 298 624

194195 Non‐network assets expenditure 1,446 1,780 2,218 1,199 1,187 1,700


Schedule 11a Explanatory Notes

The box below provides commentary specific to the difference between nominal and constant price capital expenditure forecasts. It is provided in the same format as required for Box 1, Schedule 14a of the Gas Transmission Information Disclosures, which will be fully disclosed within 6 months of the end of the disclosure year.

Commentary on difference between nominal and constant price capital expenditure forecasts

Vector has used the NZIER (New Zealand Institute of Economic Research) March 2014 PPI (Producer Price Index-outputs) forecast from 2014 to 2017. Thereafter Vector has assumed a long-term inflation rate of 2.5%. The constant price capital expenditure forecast is then inflated by the above mentioned PPI forecast to nominal price capital expenditure forecasts.

Additional explanatory notes pertaining to Schedule 11a are provided in the box below, in the format required for Schedule 15 of the Gas Transmission Information Disclosures:

Additional explanatory comment on disclosed information

Although a substantial proportion of Vector’s annual expenditure is to address safety, reliability, regulatory, legislative, quality and environmental aspects, these aspects are not estimated separately in projects with multiple business drivers. For projects of this nature, this expenditure is therefore rolled-up into other capex categories such as Asset Replacement and Renewal.




Appendix 2 – Schedule 11b Report on Forecast Operational Expenditure


Company NameAMP Planning Period

SCHEDULE 11b: REPORT ON FORECAST OPERATIONAL EXPENDITURE

sch ref7

8 Current Year CY CY+1 CY+2 CY+3 CY+4 CY+5 CY+6 CY+7 CY+8 CY+9 CY+109 for year ended 30 Jun 14 30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19 30 Jun 20 30 Jun 21 30 Jun 22 30 Jun 23 30 Jun 24

10 Operational Expenditure Forecast $000 (in nominal dollars)

11 Service interruptions, incidents and emergencies 644 679 723 745 764 783 802 822 843 864 886

12 Routine and corrective maintenance and inspection 11,322 10,880 11,122 11,463 11,750 13,383 14,404 14,061 12,969 13,663 14,640

13 Asset replacement and renewal ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

14 Network opex 11,966 11,559 11,845 12,208 12,514 14,166 15,206 14,883 13,812 14,527 15,526

15 System operations 394 757 650 670 687 704 722 740 758 777 796

16 Network support 7,761 6,226 6,117 6,305 6,463 6,624 6,790 6,960 7,134 7,312 7,495

17 Business support 6,830 8,035 8,260 8,514 8,727 8,945 9,168 9,398 9,632 9,873 10,120

18 Compressor fuel 3,710 3,926 4,730 4,875 4,997 5,122 5,250 5,381 5,516 5,653 5,795

19 Land management and associated activity 136 91 148 153 157 161 165 169 173 177 182

20 Non‐network opex 18,831 19,035 19,905 20,517 21,031 21,556 22,095 22,648 23,213 23,792 24,388

21 Operational expenditure 30,797 30,594 31,750 32,725 33,545 35,722 37,301 37,531 37,025 38,319 39,914


24 $000 (in constant prices)25 Service interruptions, incidents and emergencies 644 661 685 685 685 685 685 685 685 685 685

26 Routine and corrective maintenance and inspection 11,322 10,596 10,536 10,536 10,536 11,708 12,294 11,708 10,536 10,829 11,320


28 Network opex 11,966 11,257 11,221 11,221 11,221 12,393 12,979 12,393 11,221 11,514 12,005

29 System operations 394 737 616 616 616 616 616 616 616 616 616

30 Network support 7,761 6,063 5,795 5,795 5,795 5,795 5,795 5,795 5,795 5,795 5,795

31 Business support 6,830 7,825 7,825 7,825 7,825 7,825 7,825 7,825 7,825 7,825 7,825

32 Compressor fuel 3,710 3,823 4,481 4,481 4,481 4,481 4,481 4,481 4,481 4,481 4,481

33 Land management and associated activity 136 89 141 141 141 141 141 141 141 141 141

34 Non‐network opex 18,831 18,537 18,858 18,858 18,858 18,858 18,858 18,858 18,858 18,858 18,858

35 Operational expenditure 30,797 29,794 30,079 30,079 30,079 31,251 31,837 31,251 30,079 30,372 30,863

36 Subcomponents of operational expenditure (where known)37 Research and Development ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

38 Insurance 1,951 1,938 1,938 1,938 1,938 1,938 1,938 1,938 1,938 1,938 1,938


41 Difference between nominal and real forecasts $000

42 Service interruptions, incidents and emergencies ‐ 18 38 60 79 98 117 137 158 179 201

43 Routine and corrective maintenance and inspection ‐ 284 586 927 1,214 1,675 2,110 2,353 2,433 2,834 3,320


45 Network opex ‐ 302 624 987 1,293 1,773 2,227 2,490 2,591 3,013 3,521

46 System operations ‐ 20 34 54 71 88 106 124 142 161 180

47 Network support ‐ 163 322 510 668 829 995 1,165 1,339 1,517 1,700

48 Business support ‐ 210 435 689 902 1,120 1,343 1,573 1,807 2,048 2,295

49 Compressor fuel ‐ 103 249 394 516 641 769 900 1,035 1,172 1,314

50 Land management and associated activity ‐ 2 7 12 16 20 24 28 32 36 41

51 Non‐network opex ‐ 498 1,047 1,659 2,173 2,698 3,237 3,790 4,355 4,934 5,530

52 Operational expenditure ‐ 800 1,671 2,646 3,466 4,471 5,464 6,280 6,946 7,947 9,051

This schedule requires a breakdown of forecast operational expenditure for the disclosure year and a 10 year planning period. The forecasts should be consistent with the supporting information set out in the AMP. The forecast is to be expressed in both constant price and nominal dollar terms.

GTBs must provide explanatory comment on the difference between constant price and nominal dollar operational expenditure forecasts in Schedule 14a (Mandatory Explanatory Notes).

This information is not part of audited disclosure information.



Schedule 11b Explanatory Notes

The box below provides commentary specific to the difference between nominal and constant price operational expenditure forecasts. It is provided in the same format as required for Box 2, Schedule 14a of the Gas Transmission Information Disclosures, which will be fully disclosed within 6 months of the end of the disclosure year.

Commentary on difference between nominal and constant price operational expenditure forecasts

Vector has used the NZIER (New Zealand Institute of Economic Research) March 2014 PPI (Producer Price Index-outputs) forecast from 2014 to 2017. Thereafter Vector has assumed a long-term inflation rate of 2.5%. The constant price operational expenditure forecast is then inflated by the above mentioned PPI forecast to nominal price operational expenditure forecasts.




Appendix 3 – Schedule 12a Report on Asset Condition


Company NameAMP Planning Period

SCHEDULE 12a: REPORT ON ASSET CONDITION

sch ref

7

8 Asset category Asset class Units Grade 1 Grade 2 Grade 3 Grade 4 Grade unknown Data accuracy (1–4)

% of asset forecast to be replaced in next 5 years

9 Pipes Protected steel pipes km ‐ 0.4% 30.1% 69.4% ‐ 3 0.3%

10 Pipes Special crossings km ‐ 2.1% 30.7% 67.2% ‐ 3 0.0%

11 Stations Compressor stations No. ‐ 12.5% 87.5% ‐ ‐ 3 ‐

12 Stations Offtake point No. ‐ 41.2% 58.8% ‐ ‐ 3 1.8%

13 Stations Scraper stations No. ‐ ‐ 100.0% ‐ ‐ 3 ‐

14 Stations Intake points No. ‐ ‐ 100.0% ‐ ‐ 3 ‐

15 Stations Metering stations No. ‐ ‐ 100.0% ‐ ‐ 3 ‐

16 Compressors Compressors—turbine driven No. ‐ ‐ 100.0% ‐ ‐ 4 ‐

17 Compressors Compressors—electric motor driven No. ‐ ‐ ‐ ‐ ‐ N/A ‐

18 Compressors Compressors—reciprocating engine driven No. 21.1% 63.2% 15.8% ‐ ‐ 4 ‐

19 Main‐l ine valves Main l ine valves manually operated No. ‐ 9.9% 90.1% ‐ ‐ 4 ‐

20 Main‐l ine valves Main l ine valves remotely operated No. ‐ ‐ 100.0% ‐ ‐ 4 ‐

21 Heating systems Gas‐fired heaters No. ‐ 21.4% 68.0% 10.7% ‐ 4 7.0%

22 Heating systems Electric heaters No. ‐ ‐ 100.0% ‐ ‐ 4 ‐

23 Odorisation plants Odorisation plants No. ‐ 4.3% 95.7% ‐ ‐ 4 ‐

24 Coalescers Coalescers No. ‐ ‐ 100.0% ‐ ‐ 4 ‐

25 Metering systems Meters—ultrasonic No. 14.3% 28.6% 57.1% ‐ ‐ 4 ‐

26 Metering systems Meters—rotary No. 51.7% 13.8% 34.5% ‐ ‐ 4 10.0%

27 Metering systems Meters turbine No. 63.9% 13.9% 16.7% 5.6% ‐ 4 30.0%

28 Metering systems Meters—mass flow No. ‐ ‐ 100.0% ‐ ‐ 4 ‐

29 SCADA and communications Remote terminal units (RTU) No. ‐ 40.3% 40.3% 19.4% ‐ 4 7.5%

30 SCADA and communications Communications terminals No. ‐ ‐ 100.0% ‐ ‐ 4 ‐

31 Cathodic protection Rectifier units No. ‐ 12.1% 81.8% 6.1% ‐ 4 18.0%

32 Chromatographs Chromatographs No. 33.3% 33.3% 22.2% 11.1% ‐ 4 20.0%


Asset condition at start of planning period (percentage of units by grade)

This schedule requires a breakdown of asset condition by asset class as at the start of the forecast year. The data accuracy assessment relates to the percentage values disclosed in the asset condition columns. Also required is a

forecast of the percentage of units to be replaced in the next 5 years. All information should be consistent with the information provided in the AMP and the expenditure on assets forecast in Schedule 11a.


Schedule 12a Explanatory Notes

Explanatory notes pertaining to Schedule 12a are provided in the box below, in the format required for Schedule 15 of the Gas Transmission Information Disclosures:


In some cases the number of asset classes and asset categories included in Schedule 12a do not reflect the actual number of assets included in the AMP. This is due to how the definitions included in the ID Determination have to be interpreted:

a) The ID Determination does not define Scraper Station. Vector has interpreted a Scraper Station to mean a station used for the prime purpose of PIG launching/receiving. Therefore 11 Scraper Stations are included in Schedule 12a. PIG launchers/receivers installed at stations that have another prime purposes e.g. Compressor Stations, have not been counted;

b) The ID Determination definition for Main-line valve is: “means any valves and ancillary devices in a dedicated station, installed for the purpose of stopping the flow of gas in a pipeline or lateral. This does not include instrumentation valves or valves installed in any other station type.” Therefore Vector has counted 78 Main-line valves in accordance with this definition. Main-line valves installed at stations that have another prime purpose e.g. Compressor stations, have not been counted; and

c) The ID Determination definition for Metering System is: “means devices that measure and record the quantity of gas that has flowed through a point in a period of time and may additionally measure and record the rate of flow”. Therefore Vector has counted 137 metering systems in Schedule 12a. Some metering systems comprise of more than one meter and any meters in addition to the first meter at the metering system have not been counted.

Assets assessed as grade 1 condition will generally be replaced first and capex provision has been made in the AMP where replacement is considered appropriate. However some grade 1 condition assets e.g. metering systems have been assessed as grade 1 condition due to the expiry of their recognized design life. Not all grade 1 condition metering systems will be replaced in the next five years as metering system condition will be monitored and where metering systems continue to perform as grade 2 condition assets, replacement will be deferred. The three compressor units at Derby Road compressor station and one compressor unit at Kapuni Gas Treatment Plant, assessed as grade 1 condition, are rarely used for operational purposes. Therefore it is not planned to replace any grade 1 condition compressor units in the next five years. It is not planned to replace all grade 2 condition assets but to extend the serviceable life of these assets where it is considered safe, prudent and cost effective to do so.




Appendix 4 – Schedule 12b Report on Forecast Demand


Company Name

AMP Planning Period

SCHEDULE 12b: REPORT ON FORECAST DEMAND

sch ref

7 12b(i): Connections8 Current Year CY CY+1 CY+2 CY+3 CY+4 CY+5

9 for year ended 30 Jun 14 30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19

10 Consumer types defined by GTB11 [GTB consumer type] (1) 2

12 [GTB consumer type]




16 * include additional rows if needed17 Connections total (1) 2 ‐ ‐ ‐ ‐

18192021 Current Year CY CY+1 CY+2 CY+3 CY+4 CY+522 for year ended 30 Jun 14 30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19

23 12b(ii): Gas conveyed24 Total gas entering the system at injection points 85,146 86,943 86,937 86,935 86,936 86,940

25 Total gas delivered to consumers 83,909 85,679 85,674 85,672 85,672 85,676

26 Total gas used in compressor stations 531 542 542 542 542 542

27 Total gas used in heating systems 122 125 124 124 124 125

28 Total unaccounted for gas 247 597 597 597 597 597

29 Total gas conveyed 84,561 86,346 86,340 86,338 86,339 86,343

This Schedule requires a forecast of new connections (by consumer type) and gas delivered for the current disclosure year and a 5 year planning period. The forecasts should be

consistent with the supporting information set out in the AMP and the assumptions used in developing the capital expenditure forecast in Schedule S11a [and 11b]



Schedule 12b Explanatory Notes Explanatory notes pertaining to Schedule 12b are provided in the box below, in the format required for Schedule 15 of the Gas Transmission Information Disclosures:


Line Pack Schedule 12b asks for quantities of gas entering the system and exiting or being used within the system, as well as unaccounted for gas. However, it does not take account of changes to line pack gas. Line pack gas is gas kept in the system to maintain the required system pressure level. For this reason, in the disclosure for CY total gas entering the system does not equal total gas delivered to consumers plus total gas used in compressor stations plus total gas used in heating systems plus total unaccounted for gas. That is, some gas which has entered the system simply remains there and is not used or delivered as it has been purchased by Vector to increase Line Pack or, in the case where total gas conveyed plus unaccounted for gas is greater than the gas injected into the system, Vector has sold gas to decrease Line Pack. Where line pack changes equal zero or can be assumed to be zero then this equation will balance. Changes in Line Pack between two points in time are possible where there are differences in the measured pressure and/or temperature. Vector uses its best endeavours to maintain Line Pack within acceptable operational limits for defined sections of pipeline. Therefore, over time, by maintaining the line pack within these limits the changes to line pack can be assumed to be zero even though between two defined points in time material changes in line pack may be identified. Vector has therefore forecast line pack changes to be zero over the five year planning period so the gas totals for those disclosure years balance. Connections Schedule 12b appears to include a drafting error where the metric “number of connections” has been omitted from the table of Connections in 12b (i). That term has been used in the equivalent schedules for both electricity and (by amendment via the Commission’s Issues Register) gas distribution. Vector has therefore assumed that disclosure in 12 b (i) should be by “number of connections” which is defined in Schedule 16 as “number of new offtake points”. An offtake point has been interpreted to mean a delivery point. Consistent with disclosure across electricity and gas distribution, and the Commission’s Issues Register, gross new connections are disclosed.

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